Whether you think they are good or bad, mergers are something that we are all going to have to deal with in one way or another. Mergers in the 21st century are unavoidable. During the last twenty years, mergers have been prevalent not only here in the U.S., but around the world. It seems that companies are combining in order to compete in this fast economy. Everything from the telephone carriers we use to the oil companies, which power our automobiles and homes are merging at an incredible pace and size. Mergers can be both helpful and damaging, depending on the circumstances. It can also produce huge monopolies which some people say damage the traditional mom & pop business.
Mergers can help an economy by producing employment and helping communities by increasing revenue. For example, United Bank of Switzerland and Warburg Dillon Read Inc. merged in June 1998 and decided to move its US headquarters to downtown Stamford, Connecticut. This created jobs for construction workers, electricians, and plumbers etc. Around this time Businesses in that area were not doing so good. Businesses, such as restaurants, drycleaners, and pubs got a boost due to their new neighbors. Not only did businesses do well, but the real estate in Stamford was also rejuvenated. .
During a merger there are going to be winners and losers, more jobs can be created but many times there is a surplus of employees which leads to layoffs and terminations. If this is a global firm one has to worry whether the jobs will be moved overseas, which in many cases is cheaper to do, especially when it deals in manufacturing. So many firms have merged recently that it looks as if one day there will only be one company left standing. .
Recently with the UBS and PaineWebber merger in 2000, many people just packed up and left because the commute from CT to New Jersey was just too much. This is an example of how location affects employment due to a merger; hence these people left their NY & NJ homes only two years ago to come to CT.